When Covid-19 was classified as a public health emergency (PHE) in the US, telehealth visits climbed to approximately 50% at the pandemic’s peak in April 2020, as per the American Medicine Association (AMA) journal JAMA Network.

Over the last year, there have been signs which indicate that telehealth utilisation in the US has been declining since its pandemic-era zenith.

Research by Trilliant Health has found that since the time of peak utilisation in the US during the Covid-19 pandemic, telehealth volumes have declined or plateaued quarter-over-quarter.

After a three-year run, UnitedHealth Group's Optum Virtual Care shuttered operations in April 2024. Walmart soon followed suit, announcing that it would be shuttering its Walmart Health centres and Walmart Health Virtual Care operations, the grocery giant said it had determined there was not a “sustainable business model” for it to continue operating. Compounding this challenge, the US is facing a physician shortage which could result in a shortfall of 86,000 physicians by 2036, as per the Association of American Medical Colleges (AAMC).

The current implication is that while telehealth in the pandemic was a well-utilised service by necessity, it is faltering now in-person visits are back on the table.

Despite this, telehealth is forecast to reach a global market value of $3.8bn by 2030, as per GlobalData analysis.

While the initial pandemic surge in telehealth utilisation suggested a potential paradigm shift in healthcare delivery, Sanjula Jain, senior vice president and market strategy & chief research officer at Trilliant, says its decline indicates a more nuanced reality.

“Tapering telehealth demand indicates that consumers largely view telehealth as an appropriate substitute for low-acuity in-person behavioural health treatment and less frequently for chronic condition management or cancer treatment,” says Jain.

Refining the telehealth model

Kaveh Safavi, senior managing director for Accenture’s global healthcare business, believes that the shuttering of Optum and Walmart’s telehealth operations should not be taken as a statement about virtual healthcare writ large, but that they are more reflective of a particular business model’s failure.

This assertion is borne out of the fact the telehealth devices market in the US is projected to reach a value of $101.3m by 2030, growing at a compound annual growth rate (CAGR) of 9.84%, versus $72.7m for telehealth software and services growing at CAGR of 4.98%, as per GlobalData analysis.

“Part of the challenge was that there was a whole host of businesses built specifically around virtual that was used for common medical conditions. Essentially, the market didn't support that service or that business model,” says Safavi.

“There has been oversaturation in the market with companies providing a particular kind of limited virtual care as a standalone service. In the US, there was more capacity than demand for that service and that business model.”

Consequently, the current move from providers is to rationalise telehealth as a means to scale capacity, to account for growing healthcare labour supply shortages in the US.

According to Safavi, its use in extending the reach of doctors, nurses, pharmacists and physical therapists, for services that can be done at a distance, is what providers are taking advantage of now.

“This isn't going to be a patient convenience-driven market, but rather one of spreading clinical resources out in a bigger, more efficient way. People who think about telehealth as a way to organise and make capacity more available will have durable models”.

For providers to realise this vision, evolving their services may involve splitting the workforce into doctors who can take care of consultancy that can be done virtually, and doctors who take care of things that need to be done physically. It is a solution to give patients a higher chance of having their needs met in the best way and mitigating frustration for doctors faced with dealing with a medical issue virtually that could only reasonably be done via an in-person visit.

"Instead of having the patient select, we're going to triage the patients when they try to interact with the system. We will route the patients to virtual if that's appropriate care versus physical, rather than the patient choosing to go to virtual at the outset,” explains Safavi.

“In addition, this model is being used for nursing and in-hospital nursing, where we can take the job of a nurse and break it up into tasks that are cognitive and can be done at a distance, versus ones that are physical and need to be done in the room.” 

The wisdom of this methodology, Safavi says, is that it helps realise a new labour pool.

“Now, my nurse labour pool isn't constrained to nurses who can drive to my hospital. I can take nurses that live anywhere in a country and start having them take care of patients, so I can scale my nurse resources differently.”

Dr Helen Hughes, medical director for Johns Hopkins Medicine’s Office of Telemedicine, agrees with this viewpoint and states that patients and providers should have the ability to choose the right care tool for the patient’s needs, whether this takes the form of electronic portal messaging, a telephone call, a telemedicine visit, an in-person office visit, or an emergency department visit.

“For most primary and speciality healthcare needs, telemedicine makes sense when it is part of a coordinated hybrid care delivery model that can offer patients both telemedicine and in-person options,” says Hughes.

However, in the long term, the adoption of the telehealth model may be largely dependent upon the continuation of certain flexibilities granted to telehealth with the enactment of a PHE during the pandemic.

The continuation of telehealth flexibilities

In October 2023, the US Drug Enforcement Agency (DEA) and the US Department of Health and Human Services (HHS) extended telehealth flexibilities until December 31, 2024.

The flexibilities include: permanently removing telehealth geographic restrictions and expanding originating site locations to include patients’ homes; removing requirements for in-person visits for behavioural health treatment; and allowing rural health clinics and federally qualified health centres to serve as distant sites.

The AMA has continued to press for more licensure flexibilities for telehealth moving forward, its view being that the service is a critical offering in accounting for America’s physician shortage.

On 10 April 2024, the American Hospital Association (AHA) submitted a letter to the House Energy and Commerce Subcommittee on Health for a hearing on legislative proposals to support patient access to telehealth services:

“Given current health care challenges, including major clinician shortages nationwide, telehealth holds tremendous potential to leverage geographically dispersed provider capacity to support patient demand,” wrote the AHA.

“We urge Congress to make these key telehealth flexibilities permanent before they expire.”

Hughes says the uncertainty around whether these rules will continue past December 2024 has been a recent challenge in the telehealth space, along with a return to pre-Covid state-based licensure restrictions to cross-state telemedicine, with pre-pandemic rollbacks having been applied into most states, meaning that doctors need to be licensed in a given state to practice medicine, even if this is via telehealth.

“Our teams loved the ability to do introductory or follow-up visits via telemedicine across state lines,” says Hughes. “We hear from patients frequently that they want to be able to continue to see their Hopkins provider regardless of whether they live across state lines or are travelling for a vacation.” 

The knock-on effect of the impact of declines in telehealth

If the signs that telehealth is a declining service proposition are true, further challenges for the US healthcare system could be on the horizon, namely in the rising rate of appointment no-shows, which past research has suggested costs the US healthcare system $150bn annually.

Senior citizens are the most likely group to miss healthcare appointments due to a lack of transportation, as per Chris Ochs, chief development officer at non-emergency medical transportation company (NEMT) Kerico.

Further, factors that limit telehealth as a viable alternative to in-person visits include a poor grasp on technology or a lack of access to it among senior citizens and poor internet connection speeds in rural and low-income demographic areas of the US.

“As a society, we're getting older, we're getting sicker, and we’re driving less,” says Ochs.

“When the three circles of that Venn diagram come together, you've got a demographic of seniors that are not driving, and they need to get to where they need to go, and telemedicine is no longer really an option for them. And so, it comes back to transportation.”

“The demand for getting patients in need to their appointments is continuing to surge. And every dollar spent on non-emergency medical transportation equates to $11 saved in emergency room healthcare,” says Ochs.

Ochs' assertion bears out in research by Fair Health. The healthcare data company’s Monthly Telehealth Regional Tracker for March 2024 showed that telehealth rates in US states including California, Texas, and Florida were below 3% in the over-65 age demographic.

While it seems unlikely that telehealth utilisation will return to the heights during the pandemic, with a right-sized delivery model, hybridised and mindful of a patient’s healthcare requirements, it has its place as a lever as the unmet need for healthcare professionals in the US grows ever more acute.

In addition, the service is beginning to move in different directions than its pandemic-era conceptualisation, with augmentation through AI and the convergence of remote patient monitoring devices.

As per GlobalData analysts, AI algorithms can analyse large amounts of patient data collected via remote patient monitoring devices and detect trends or issues. AI-powered robots can enable surgeons to perform surgical procedures in a different location from the patient, allowing for remote surgical assistance.

What seems clear is that while utilisation of telehealth is declining, at least in its nascent form, rightsizing telehealth for the future, as a hybridised service delivery to alleviate pressure on a scarcity of providers in certain geographic regions of the US, and one expanding into new treatment areas, the service appears likely to retain a position within the US healthcare landscape.

As Kaveh Safavi says, virtual is just one in a range of healthcare modalities, and for providers to meet patients on their terms, every modality needs to be available to them.